Condonation of Delay in case of Registration of Charge – Section 87 of the Companies Act, 2013

CONDONATION OF DELAY BY CENTRAL GOVERNMENT IN CASE OF REGISTRATION OF CHARGE

(Rectification by Central Government in Register of Charges)

(Section 87 of the Companies Act, 2013 and Companies (Registration of Charges) Rules, 2014)

Please Note that Power of Central Government has been delegated to Regional Directors vide notification dated 19^th December, 2016.

INTRODUCTION

As per section 87 of the Companies Act, 2013, where the instrument creating or modifying a charge is not filed within a period of 300 days from the date of its creation or modification and where the satisfaction of the charge is not filed within 30 days from the date on which such payment of satisfaction, the Registrar shall not register the same unless the delay is condoned by the Regional Directors.

The Regional Directors on being satisfied that-

The particulars of registration of Creation/modification/satisfaction of charge could not be filed with the Registrar within the time, or
The omission or mis-statement of any particulars in respect of creation/modification/satisfaction of charge was,

due to accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company; or on any other grounds, it is just and equitable to grant relief, it may on the application of the company or any person interested and on such terms and conditions as it may seem to the Regional Directors just and expedient, direct that the time for the filing of the particulars of Registration of creation/modification/satisfaction of charge shall be extended or the omission or mis-statement shall be rectified.

PROCEDURE

The application for Condonation of delay for registration of creation/modification/satisfaction of charge or for rectification of omission or mis-statement in respect of creation/modification/satisfaction of charge shall be filed with the Regional Directors in e-Form CHG-8 along with the fee with the following attachments:

Instrument creating/modifying/satisfying the Charge
Certified true copy of the Board Resolution authorizing for filing the application and appointing authorized representative, if any.
Petition
Affidavit verifying the petition by the director of the company authorized for the same
Memorandum of Appearance by the Authorized representative appointed for the same
Certified Copy of the CHG-1/CHG-9/CHG-4 with challan
Letter of Authorization (In case of authorized representative of a foreign company)
Other document, if any.

NOTE: Petition along with the documents mentioned above and certified copy of CHG-8 with the challan shall also be filed physically with the concerned Regional Directors.

The order passed by the Regional Directors shall be filed with the Registrar in e-Form INC-28 along with the fee and as per the conditions stipulated in the said order.

PENALTY

If any company contravenes any provision of the Chapter VI – Registration of Charge and the rules made there under,

the company shall be punishable with fine which shall not be less than Rs. 1 Lakh but which may extend to Rs. 10 Lakh, and
every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 6 months or with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 1 Lakh, or with both.

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VISHAL SHARMA

Company Secretary

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